TOGI 8-K
TurnOnGreen, Inc. (TOGI)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
____________________________________________________________
FORM
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
___________________________________________________________________
Date of Report (Date of earliest event reported):
(Exact name of registrant as specified in its charter)
| (State or other jurisdiction of incorporation or organization) |
(Commission File Number) | (I.R.S. Employer Identification No.) |
(Address of principal executive offices) (Zip Code)
(Registrant's telephone number, including area code)
(Former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
Securities registered pursuant to Section 12(b) of the Act: None.
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company
If an emerging growth company, indicate by check
mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting
standards provided pursuant to Section 13(a) of the Exchange Act.
| Item 1.01 | Entry into a Material Definitive Agreement |
On December 15, 2021 (the “Closing Date”), Imperalis Holding Corp (the “Company”) entered into an exchange agreement (the “Exchange Agreement”) with Digital Power Lending, LLC (“DPL”), pursuant to which the Company issued a convertible promissory note (the “Convertible Note”) to DPL, in the principal amount of $101,528.77, in exchange for those certain promissory notes dated August 18, 2021 and November 5, 2021 (the “Promissory Notes”) issued to DPL in the aggregate principal amount of $100,000, which Promissory Notes had accrued interest of $1,528.77 as of the Closing Date.
The Convertible Note accrues interest at 10% per annum, is due on December 15, 2023, and the principal, together with any accrued but unpaid interest on the amount of principal, is convertible into shares of the Company’s common stock, $0.001 par value per share (the “Common Stock”) at DPL’s option at a conversion price of $0.01 per share.
The foregoing descriptions of the Convertible Note and Exchange Agreement do not purport to be complete and are qualified in their entirety by reference to their respective forms, which are annexed hereto as Exhibits 4.1 and 10.1, respectively, to this Current Report on Form 8-K and are incorporated herein by reference. The foregoing does not purport to be a complete description of the rights and obligations of the parties thereunder and such descriptions are qualified in their entirety by reference to such exhibits.
| Item 3.02 | Unregistered Sales of Equity Securities |
The information contained in Item 1.01 of this Current Report on Form 8-K is incorporated herein by reference to this Item 3.02.
| Item 5.01 | Changes in Control of Registrant |
On December 16, 2021 (the “Closing Date”), Vincent Andreula, Michael Andreula and Kristie Andreula, each a stockholder of the Company (collectively, the “Sellers”), entered into a stock purchase agreement (the “Stock Purchase Agreement”) with BitNile, Inc. (“BitNile”). Pursuant to the Stock Purchase Agreement, BitNile purchased 129,363,756 shares of Common Stock from the Sellers in exchange for $200,000. Upon the closing of the Stock Purchase Agreement, BitNile owns approximately 90% of the Company’s Common Stock, resulting in a change in control of the Company.
The foregoing description of the Stock Purchase Agreement does not purport to be complete and is qualified in its entirety by reference to the form, which is annexed hereto as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated herein by reference. The foregoing does not purport to be a complete description of the rights and obligations of the parties thereunder and such descriptions are qualified in their entirety by reference to such exhibit.
Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers
On the Closing Date, Messrs. Vincent Andreula and Michael Andreula, and Ms. Kristie Andreula, resigned as the Company’s officers. In addition, Mr. Vincent Andreula resigned as director on the Closing Date and his resignation is to be effective upon the 10th day after the mailing of a Schedule 14F-1, in accordance with Rule 14f-1 under the Securities Exchange Act of 1934, to the Company’s stockholders.
On the Closing Date, the Company appointed Henry Nisser as its Chief Executive Officer and a director and David J. Katzoff as its Chief Financial Officer, Secretary and Treasurer. Messrs. Nisser and Katzoff will work for the Company on a part-time basis as needed and currently will not receive any compensation for such services.
Henry Nisser, 53, has served as General Counsel of BitNile Holdings, Inc. (“BitNile Holdings”) since May 2019, as a Director since September 2020 and President since January 2021. Between May 2019 and January 2021, Mr. Nisser also served as Executive Vice President. BitNile Holdings is the parent company of BitNile and DPL. Mr. Nisser is also the President, General Counsel and a Director of Ault Disruptive Technologies Corporation. Mr. Nisser has served as the Executive Vice President and General Counsel of Alzamend Neuro, Inc. (“Alzamend”) on a part-time basis since May 2019, and has been a director of that company since September 2020. Mr. Nisser has also been the Executive Vice President and General Counsel of Avalanche International Corp. since May 2019. Prior to joining BitNile Holdings and these companies, Mr. Nisser practiced law at the New York law firm Sichenzia Ross Ference LLP from October 2011 to April 2019, concentrating on national and international corporate law, with a focus on U.S. federal securities law compliance, mergers and acquisitions, equity and debt financings, and corporate governance. Mr. Nisser earned a B.A. degree in international relations and economics from Connecticut College and an LL.B. from University of Buckingham School of Law in the United Kingdom.
David Katzoff, 60, has served as Senior Vice President of Finance of BitNile Holdings since January 2019. Mr. Katzoff joined Alzamend on a part-time basis in November 2019, serving as its Senior Vice President of Operations from November 2019 to December 2020, and currently serves as its Chief Operating Officer since December 2020. From 2015 to 2018, Mr. Katzoff served as Chief Financial Officer of Lumina Media, LLC, a privately-held media company and publisher of life-style publications. From 2003 to 2017, Mr. Katzoff served a Vice President of Finance of Local Corporation, a publicly-held local search company. Mr. Katzoff received a B.S. degree in Business Management from the University of California at Davis.
| -2- |
| Item 9.01 | Financial Statements and Exhibits |
| (d) | Exhibits: |
| Exhibit No. | Description | |
| 4.1 | Convertible Promissory Note, dated December 15, 2021, made by Imperalis Holding Corp. in favor of Digital Power Lending, LLC. | |
| 10.1 | Exchange Agreement between Imperalis Holding Corp. and Digital Power Lending, LLC, dated as of December 15, 2021. | |
| 99.1 | Form of Stock Purchase Agreement among BitNile, Inc., Vincent Andreula, Michael Andreula and Kristie Andreula, dated as of December 16, 2021. | |
| 101 | Pursuant to Rule 406 of Regulation S-T, the cover page is formatted in Inline XBRL (Inline eXtensible Business Reporting Language). | |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document and included in Exhibit 101). |
| -3- |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| IMPERALIS HOLDING CORP. | |
| Dated: December 21, 2021 |
/s/ Henry Nisser Henry Nisser Chief Executive Officer |
-4-
Exhibit 4.1
CONVERTIBLE PROMISSORY NOTE
NEITHER THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE CONVERTIBLE HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL TO THE HOLDER (IF REQUESTED BY THE COMPANY), IN A FORM REASONABLY ACCEPTABLE TO THE COMPANY, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD OR ELIGIBLE TO BE SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER SAID ACT. NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES. ANY TRANSFEREE OF THIS CONVERTIBLE PROMISSORY NOTE SHOULD CAREFULLY REVIEW THE TERMS OF THIS CONVERTIBLE PROMISSORY NOTE, INCLUDING SECTIONS 3(c)(iii) AND 10(a) HEREOF. THE PRINCIPAL AMOUNT REPRESENTED BY THIS CONVERTIBLE PROMISSORY NOTE AND, ACCORDINGLY, THE SECURITIES ISSUABLE UPON CONVERSION HEREOF MAY BE LESS THAN THE AMOUNTS SET FORTH ON THE FACE HEREOF PURSUANT TO SECTION 3(c)(iii) OF THIS CONVERTIBLE PROMISSORY NOTE.
IMPERALIS HOLDING CORP.
CONVERTIBLE PROMISSORY NOTE DUE DECEMBER 15, 2023
| Issuance Date: December 15, 2021 | Principal Amount: $101,528.77 |
FOR VALUE RECEIVED, Imperalis Holding Corp., a Nevada corporation (the “Company”), hereby promises to pay to the order of Digital Power Lending, LLC, or its registered assigns (“Holder”) the amount set forth above as the original principal amount (the “Principal”) when due, whether upon December 15, 2023 (the “Maturity Date”), or upon acceleration, prepayment or otherwise (in each case in accordance with the terms hereof) and to pay interest (“Interest”) on any outstanding Principal at the applicable Interest Rate (as defined below) from the date set forth above as the Issuance Date (the “Issuance Date”) until the same becomes due and payable, whether upon the Maturity Date or upon acceleration, conversion, prepayment or otherwise (in each case in accordance with the terms hereof). This Convertible Promissory Note (this “Note”) is issued to the Holder as of the Issuance Date by the Company. Certain capitalized terms used herein are defined in Section 19. The Company acknowledges and agrees that the exchange of this Note for the Promissory Notes issued on August 18, 2021 and November 5, 2021 (collectively, the “Prior Note”), did not involve the payment of, or giving of a commission, or other remuneration, directly or indirectly, in connection with, the exchange and that the exchange was exempt from registration under Section 3(a)(9) of the Securities Act of 1933, as amended (the “Securities Act”). In addition, the Company acknowledges and agrees that the exchange of the Prior Note for this Note, did not involve the payment of, or giving of a commission, or other remuneration, directly or indirectly, in connection with, the exchange and that the exchange was exempt from registration under Section 3(a)(9) of the Securities Act. Accordingly, the Company shall at all times agree that the holding period of this Note for purposes of Rule 144 under the Securities Act tacks back to August 18, 2021 for $20,000 in Principal and November 5, 2021 for $80,000 in Principal and the date of this Note for $1,528.77 in Principal, which represents all accrued but unpaid interest on the Prior Note.
| 1. | PAYMENTS OF PRINCIPAL. |
On the Maturity Date, the Company shall pay to the Holder an amount in cash representing all outstanding Principal and accrued and unpaid Interest on such Principal. Other than as specifically permitted by this Note, the Company may not prepay any portion of the outstanding Principal or accrued and unpaid Interest.
| 2. | INTEREST; INTEREST RATE. |
(a) Interest on this Note shall commence accruing on December 15, 2021 at 10% per annum subject to adjustment in accordance with the terms of this Section 2 (the “Interest Rate”), shall be calculated on the basis of a 360-day year and twelve 30-day months, compounded daily, and shall be payable by the Company to the Holder, in cash, on the Maturity Date.
(b) From and after the occurrence and during the continuance of any Event of Default, the Interest Rate shall automatically be increased to the lower of 18.0% per annum or the highest amount permitted by law, shall compounded daily (the “Default Interest”), and shall be due and payable on the first Trading Day of each calendar month during the continuance of such Event of Default (a “Default Interest Payment Date”). In the event that such Event of Default is subsequently cured (and no other Event of Default then exists (including, without limitation, for the Company’s failure to pay such Interest at the Default Rate on the applicable Default Interest Payment Date), the adjustment referred to in the preceding sentence shall cease to be effective as of the day immediately following the date of such cure; provided that the Interest as calculated and unpaid at such increased rate during the continuance of such Event of Default shall continue to apply to the extent relating to the days after the occurrence of such Event of Default through and including the date of such cure of such Event of Default.
3. CONVERSION OF NOTES. This Note shall be convertible into validly issued, fully paid and non-assessable shares (the “Conversion Shares”) of the Company’s common stock, par value $0.001 per share (the “Common Stock”), on the terms and conditions set forth in this Section 3.
(a) Conversion Right. At any time following the Issuance Date, the Holder shall be entitled to convert any portion of the outstanding and unpaid Conversion Amount (as defined below) into Conversion Shares in accordance with Section 3(b), at the Conversion Rate (as defined below). The Company shall not issue any fraction of a Conversion Share upon any conversion. If the issuance would result in the issuance of a fraction of a share of Common Stock, the Company shall round such fraction of a share of Common Stock up to the nearest whole share. The Company shall pay any and all transfer, stamp, issuance and similar taxes, costs and expenses (including, without limitation, fees and expenses of the Transfer Agent (as defined below)) that may be payable with respect to the issuance and delivery of Common Stock upon conversion of any Conversion Amount.
(b) Conversion Rate. The number of Conversion Shares issuable upon conversion of any Conversion Amount pursuant to Section 3(a) shall be determined by dividing (x) such Conversion Amount by (y) the Conversion Price (the “Conversion Rate”).
(i) “Conversion Amount” means the sum of (x) portion of the Principal to be converted, prepaid or otherwise with respect to which this determination is being made and (y) all accrued and unpaid Interest with respect to such portion of the Principal amount.
(ii) “Conversion Price” means $0.01. The Conversion Price shall be subject to equitable adjustments resulting from any stock splits, stock dividends, combinations, recapitalizations or similar events. The Company, if requested by the Holding, shall issue irrevocable instructions to its transfer agent regarding conversions such that the transfer agent shall be authorized and instructed to issue shares of Common Stock upon its receipt of a Conversion Notice without further approval or authorization from the Company.
(c) Mechanics of Conversion.
(i) Optional Conversion. To convert any Conversion Amount into Conversion Shares on any date (a “Conversion Date”), the Holder shall deliver to the Company (whether via facsimile, electronic mail or otherwise), for receipt on or prior to 11:59 p.m., New York time, on such date, a copy of an executed notice of conversion in the form attached hereto as Exhibit I (the “Conversion Notice”). If required pursuant to Section 3(c)(iii) hereof, within two Trading Days following a conversion of this Note as aforesaid, the Holder shall surrender this Note to a nationally recognized overnight delivery service for delivery to the Company (or an indemnification undertaking with respect to this Note in the case of its loss, theft or destruction as contemplated by Section 10(b)). On or before the second Trading Day following the date on which the Company has received a Conversion Notice (or such earlier date as required pursuant to the Securities Exchange Act of 1934, as amended (the “Exchange Act”) or other applicable law, rule or regulation for the settlement of a trade initiated on the applicable Conversion Date of such shares of Common Stock issuable pursuant to such Conversion Notice), the Company shall (1) provided that its transfer agent is participating in the DTC Fast Automated Securities Transfer Program, credit such aggregate number of shares of Common Stock to which the Holder shall be entitled pursuant to such conversion to the Holder’s or its designee’s balance account with DTC through its Deposit/Withdrawal at Custodian system or (2) if its transfer agent is not participating in the DTC Fast Automated Securities Transfer Program, upon the request of the Holder, issue and deliver (via reputable overnight courier) to the address as specified in the Conversion Notice, a certificate, registered in the name of the Holder or its designee, for the number of shares of Common Stock to which the Holder shall be entitled pursuant to such conversion. If this Note is physically surrendered for conversion pursuant to Section 3(c)(iii) and the outstanding Principal of this Note is greater than the Principal portion of the Conversion Amount being converted, then the Company shall as soon as practicable and in no event later than two Trading Days after receipt of this Note and at its own expense, issue and deliver to the Holder (or its designee) a new Note (in accordance with Section 10(d)) representing the outstanding Principal not converted. The Person or Persons entitled to receive the Conversion Shares shall be treated for all purposes as the record holder or holders of such shares of Common Stock on the Conversion Date.
| 2 |
(ii) Reserved.
(iii) Registration; Book-Entry. The Company shall maintain a register (the “Register”) for the recordation of the names and addresses of the Holder of the Note and the principal amount of the Note (the “Registered Note”). The entries in the Register shall be conclusive and binding for all purposes absent manifest error. The Company and the holder or holders of the Note shall treat each Person whose name is recorded in the Register as the owner of a Note for all purposes (including, without limitation, the right to receive payments of Principal and Interest hereunder) notwithstanding notice to the contrary. The Registered Note may, subject to Section 18 hereof, be assigned, transferred or sold in whole or in part only by registration of such assignment or sale on the Register. Upon its receipt of a written request to assign, transfer or sell all or part of the Registered Note by the holder thereof, the Company shall record the information contained therein in the Register and issue one or more new Registered Notes in the same aggregate principal amount as the principal amount of the surrendered Registered Note to the designated assignee or transferee pursuant to Section 10, provided that if the Company does not so record an assignment, transfer or sale (as the case may be) of all or part of any Registered Note within two Trading Days of such a request, then the Register shall be automatically deemed updated to reflect such assignment, transfer or sale (as the case may be). Notwithstanding anything to the contrary set forth in this Section 3, following conversion of any portion of this Note in accordance with the terms hereof, the Holder shall not be required to physically surrender this Note to the Company unless (A) the full Conversion Amount represented by this Note is being converted (in which event this Note shall be delivered to the Company following conversion thereof) or (B) the Holder has provided the Company with prior written notice (which notice may be included in a Conversion Notice) requesting reissuance of this Note upon physical surrender of this Note. The Holder and the Company shall maintain records showing the Principal and Interest converted and/or paid (as the case may be) and the dates of such conversions, and/or payments (as the case may be) or shall use such other method, reasonably satisfactory to the Holder and the Company, so as not to require physical surrender of this Note upon conversion. If the Company does not update the Register to record such Principal and Interest converted and/or paid (as the case may be) and the dates of such conversions, and/or payments (as the case may be) within two Trading Days of such occurrence, then the Register shall be automatically deemed updated to reflect such occurrence.
4. RIGHTS UPON EVENT OF DEFAULT.
(a) Event of Default. Each of the following events shall constitute an “Event of Default”:
(i) the Company’s default under this Note or the other Transaction Documents, including a failure to pay to the Holder any amount of Principal, Interest or other amounts when and as due under this Note, the other Transaction Documents, subject to a cure period of ten (10) Trading Days;
| 3 |
(ii) the Company fails to issue Common Stock without any restrictive legend or to remove any restrictive legend on any certificate (including by book entry) for any shares of Common Stock issued to the Holder pursuant to this Note within two (2) Trading Days after (A) receipt by the Company of an executed Conversion Notice or (B) if the Holder has shares with a restrictive legend upon written notice to remove such legend, in either case together with an opinion of counsel to the Holder that no restrictive legend is required; provided, that the Company shall have two (2) Trading Days to cure any such failure, unless otherwise then prohibited by applicable federal securities laws;
(iii) bankruptcy, insolvency, reorganization or liquidation proceedings or other proceedings for the relief of debtors shall be instituted by or against the Company and, if instituted against the Company by a third party, shall not be dismissed within 30 days of their initiation;
(iv) the commencement by the Company of a voluntary case or proceeding under any applicable federal, state or foreign bankruptcy, insolvency, reorganization or other similar law or of any other case or proceeding to be adjudicated a bankrupt or insolvent, or the consent by it to the entry of a decree, order, judgment or other similar document in respect of the Company in an involuntary case or proceeding under any applicable federal, state or foreign bankruptcy, insolvency, reorganization or other similar law or to the commencement of any bankruptcy or insolvency case or proceeding against it, or the filing by it of a petition or answer or consent seeking reorganization or relief under any applicable federal, state or foreign law, or the consent by it to the filing of such petition or to the appointment of or taking possession by a custodian, receiver, liquidator, assignee, trustee, sequestrator or other similar official of the Company of any substantial part of its property, or the making by it of an assignment for the benefit of creditors, or the execution of a composition of debts, or the occurrence of any other similar federal, state or foreign proceeding, or the admission by it in writing of its inability to pay its debts generally as they become due, the taking of corporate action by the Company in furtherance of any such action or the taking of any action by any Person to commence a Uniform Commercial Code foreclosure sale or any other similar action under federal, state or foreign law;
(v) the entry by a court of (i) a decree, order, judgment or other similar document in respect of the Company of a voluntary or involuntary case or proceeding under any applicable federal, state or foreign bankruptcy, insolvency, reorganization or other similar law or (ii) a decree, order, judgment or other similar document adjudging the Company as bankrupt or insolvent, or approving as properly filed a petition seeking liquidation, reorganization, arrangement, adjustment or composition of or in respect of the Company under any applicable federal, state or foreign law or (iii) a decree, order, judgment or other similar document appointing a custodian, receiver, liquidator, assignee, trustee, sequestrator or other similar official of the Company of any substantial part of its property, or ordering the winding up or liquidation of its affairs, and the continuance of any such decree, order, judgment or other similar document or any such other decree, order, judgment or other similar document unstayed and in effect for a period of 10 consecutive days;
(vi) other than as specifically set forth in another clause of this Section 4(a), the Company breaches any representation or warranty in any material respect (other than representations or warranties subject to materiality limitations, which may not be breached in any respect) or any covenant or other term or condition of this Note or any other Transaction Document, except, in the case of a breach of a covenant or other term or condition that is curable, only if such breach remains uncured for a period of ten (10) consecutive Trading Days; or
(vii) any provision of any Transaction Document shall at any time for any reason (other than pursuant to the express terms thereof) cease to be valid and binding on or enforceable against the parties thereto, or the validity or enforceability thereof shall be contested by any party thereto, or a proceeding shall be commenced by the Company or any governmental authority having jurisdiction over it, seeking to establish the invalidity or unenforceability thereof, or the Company shall deny in writing that it has any liability or obligation purported to be created under any Transaction Document, subject to a cure period of ten (10) Trading Days.
| 4 |
(b) Notice of an Event of Default; Holder Right to Compel Prepayment upon Event of Default. Upon the occurrence of an Event of Default with respect to this Note, the Company shall within one Trading Day deliver written notice thereof via facsimile or electronic mail and overnight courier (with next day delivery specified) (an “Event of Default Notice”) to the Holder. At any time after the earlier of the Holder’s receipt of an Event of Default Notice and the Holder becoming aware of an Event of Default and ending (such ending date, the “Event of Default Right Expiration Date”) on the 20th Trading Day after the later of (x) the date such Event of Default is cured and (y) the Holder’s receipt of an Event of Default Notice that includes (I) a reasonable description of the applicable Event of Default, (II) a certification as to whether, in the opinion of the Company, such Event of Default is capable of being cured and, if applicable, a reasonable description of any existing plans of the Company to cure such Event of Default and (III) a certification as to the date the Event of Default occurred and, if cured on or prior to the date of such Event of Default Notice, the applicable Event of Default Right Expiration Date, the Holder may require the Company to prepay (regardless of whether such Event of Default has been cured on or prior to the Event of Default Right Expiration Date) all or any portion of this Note by delivering written notice thereof (the “Event of Default Prepayment Notice”) to the Company, which Event of Default Prepayment Notice shall indicate the portion of this Note the Holder is electing to have prepaid. Each portion of this Note (which may include all outstanding Principal, and accrued and unpaid Interest) subject to prepayment by the Company pursuant to this Section 4(b) shall be prepaid by the Company at a price equal to the product of: (i) the portion of this Note being prepaid; multiplied by (ii) 1.5.
5. RIGHTS UPON ISSUANCE OF OTHER SECURITIES.
(a) Adjustment of Conversion Price upon Subdivision or Combination of Common Stock. If the Company at any time on or after the Issuance Date subdivides (by any stock split, stock dividend, recapitalization or other similar transaction) one or more classes of its outstanding shares of Common Stock into a greater number of shares, the Conversion Price in effect immediately prior to such subdivision will be proportionately reduced. If the Company at any time on or after the Issuance Date combines (by any reverse stock split, or stock combination, recapitalization or other similar transaction) one or more classes of its outstanding shares of Common Stock into a smaller number of shares, the Conversion Price in effect immediately prior to such combination will be proportionately increased. Any adjustment pursuant to this Section 5(a) shall become effective immediately after the effective date of such subdivision or combination. If any event requiring an adjustment under this Section 5(a)(a) occurs during the period that a Conversion Price is calculated hereunder, then the calculation of such Conversion Price shall be adjusted appropriately to reflect such event.
(b) Other Events. In the event that the Company shall take any action to which the provisions hereof are not strictly applicable, or, if applicable, would not operate to protect the Holder from dilution or if any event occurs of the type contemplated by the provisions of this Section 5 but not expressly provided for by such provisions (including, without limitation, the granting of stock appreciation rights, phantom stock rights or other rights with equity features), then the Company’s board of directors shall in good faith determine and implement an appropriate adjustment in the Conversion Price so as to protect the rights of the Holder, provided that no such adjustment pursuant to this Section 5(b) will increase the Conversion Price as otherwise determined pursuant to this Section 5, provided further that if the Holder does not accept such adjustments as appropriately protecting its interests hereunder against such dilution, then the Company’s board of directors and the Holder shall agree, in good faith, upon an independent investment bank of nationally recognized standing to make such appropriate adjustments, whose determination shall be final and binding absent manifest error and whose fees and expenses shall be borne by the Company.
(c) Calculations. All calculations under this Section 5 shall be made by rounding to the nearest cent or the nearest 1/100th of a share, as applicable. The number of shares of Common Stock outstanding at any given time shall not include shares owned or held by or for the account of the Company, and the disposition of any such shares shall be considered an issue or sale of Common Stock.
(d) Voluntary Adjustment by Company. The Company may at any time during the term of this Note, with the prior written consent of the Holder, reduce the then current Conversion Price of the Note to any amount and for any period of time deemed appropriate by the board of directors of the Company.
6. NONCIRCUMVENTION. The Company hereby covenants and agrees that the Company will not, by amendment of the Company’s Certificate of Incorporation or other charter documents, bylaws or through any reorganization, transfer of assets, consolidation, merger, scheme of arrangement, dissolution, issue or sale of securities, or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Note, and will at all times in good faith carry out all of the provisions of this Note and take all action as may be required to protect the rights of the Holder of this Note. Without limiting the generality of the foregoing or any other provision of this Note or the other Transaction Documents, the Company (a) shall not increase the par value of any shares of Common Stock receivable upon conversion of this Note above the Conversion Price then in effect, and (b) shall take all such actions as may be necessary or appropriate in order that the Company may validly and legally issue fully paid and non-assessable shares of Common Stock upon the conversion of this Note.
| 5 |
7. RESERVATION OF AUTHORIZED SHARES. So long as the Note remains outstanding, the Company shall at all times reserve 13,000,000 shares of its Common Stock, subject to adjustment for stock splits, stock dividends, combinations and similar events.
8. PREPAYMENT. This Note may not be prepaid without the consent of the Holder, which consent may be withheld in Holder’s absolute discretion.
9. AMENDING THE TERMS OF THIS NOTE. The prior written consent of the Holder shall be required for any change, waiver or amendment to this Note. Any change, waiver or amendment so approved shall be binding upon all existing and future holders of this Note; provided, however, that no such change, waiver or, as applied to the Note held by any particular holder of the Note, shall, without the written consent of that particular holder, (i) reduce the amount of Principal, reduce the amount of accrued and unpaid Interest, or extend the Maturity Date, of the Note, (ii) disproportionally and adversely affect any rights under the Note of any holder of any other portion of the Note; or (iii) modify any of the provisions of, or impair the right of any holder of the Note under this Section 9.
(a) Transfer. If this Note is to be transferred, the Holder shall surrender this Note to the Company, whereupon the Company will forthwith issue and deliver upon the order of the Holder a new Note (in accordance with Section 10(d)), registered as the Holder may request, representing the outstanding Principal being transferred by the Holder and, if less than the entire outstanding Principal is being transferred, a new Note (in accordance with Section 10(d)) to the Holder representing the outstanding Principal not being transferred. The Holder and any assignee, by acceptance of this Note, acknowledge and agree that, by reason of the provisions of Section 3(c)(iii) following conversion or prepayment of any portion of this Note, the outstanding Principal represented by this Note may be less than the Principal stated on the face of this Note.
(b) Lost, Stolen or Mutilated Note. Upon receipt by the Company of evidence reasonably satisfactory to the Company of the loss, theft, destruction or mutilation of this Note (as to which a written certification and the indemnification contemplated below shall suffice as such evidence), and, in the case of loss, theft or destruction, of any indemnification undertaking by the Holder to the Company in customary and reasonable form and, in the case of mutilation, upon surrender and cancellation of this Note, the Company shall execute and deliver to the Holder a new Note (in accordance with Section 10(d)) representing the outstanding Principal. The Holder shall not be required to deliver a bond or other security.
(c) Note Exchangeable for Different Denominations. This Note is exchangeable, upon the surrender hereof by the Holder at the principal office of the Company, for a new Note or Notes (in accordance with Section 10(d) and in principal amounts of at least $1,000) representing in the aggregate the outstanding Principal of this Note, and each such new Note will represent such portion of such outstanding Principal as is designated by the Holder at the time of such surrender.
(d) Issuance of New Notes. Whenever the Company is required to issue a new Note pursuant to the terms of this Note, such new Note (i) shall be of like tenor with this Note, (ii) shall represent, as indicated on the face of such new Note, the Principal remaining outstanding (or in the case of a new Note being issued pursuant to Section 10(a) or Section 10(c), the Principal designated by the Holder which does not exceed the Principal remaining outstanding under this Note immediately prior to such issuance of a new Note), (iii) shall have an issuance date, as indicated on the face of such new Note, which is the same as the Issuance Date of this Note, (iv) shall have the same rights and conditions as this Note, and (v) shall represent accrued and unpaid Interest.
| 6 |
11. CONSTRUCTION; HEADINGS. This Note shall be deemed to be jointly drafted by the Company and the initial Holder and shall not be construed against any such Person as the drafter hereof. The headings of this Note are for convenience of reference and shall not form part of, or affect the interpretation of, this Note. Unless the context clearly indicates otherwise, each pronoun herein shall be deemed to include the masculine, feminine, neuter, singular and plural forms thereof. The terms “including,” “includes,” “include” and words of like import shall be construed broadly as if followed by the words “without limitation.” The terms “herein,” “hereunder,” “hereof” and words of like import refer to this entire Note instead of just the provision in which they are found. Unless expressly indicated otherwise, all section references are to sections of this Note. Terms used in this Note and not otherwise defined herein, but defined in the other Transaction Documents, shall have the meanings ascribed to such terms on the Closing Date in such other Transaction Documents unless otherwise consented to in writing by the Holder.
12. FAILURE OR INDULGENCE NOT WAIVER. No failure or delay on the part of the Holder in the exercise of any power, right or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such power, right or privilege preclude other or further exercise thereof or of any other right, power or privilege. No waiver shall be effective unless it is in writing and signed by an authorized representative of the waiving party.
13. NOTICES. Whenever notice is required to be given under this Note, unless otherwise provided herein, such notice shall be given in writing with an e-mail copy to the last address provided by the Holder or its agents in writing to the Company. The Company shall provide the Holder with prompt written notice of all actions taken pursuant to this Note, including in reasonable detail a description of such action and the reason therefor. Without limiting the generality of the foregoing, the Company will give written notice to the Holder (i) immediately upon any adjustment of the Conversion Price, setting forth in reasonable detail, and certifying, the calculation of such adjustment and (ii) at least 15 days prior to the date on which the Company closes its books or takes a record (A) with respect to any dividend or distribution upon the Common Stock, or (B) for determining rights to vote with respect to any transaction, dissolution or liquidation, provided in each case that such information shall be made known to the public prior to or in conjunction with such notice being provided to the Holder.
14. WAIVER OF NOTICE. To the extent permitted by law, the Company hereby irrevocably waives demand, notice, presentment, protest and all other demands and notices in connection with the delivery, acceptance, performance, default or enforcement of this Note.
15. GOVERNING LAW. This Note shall be construed and enforced in accordance with, and all questions concerning the construction, validity, interpretation and performance of this Note shall be governed by, the internal laws of the State of Nevada, without giving effect to any choice of law or conflict of law provision or rule (whether of the State of Nevada or any other jurisdictions) that would cause the application of the laws of any jurisdictions other than the State of Nevada. The Company hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in Clark County, Nevada, for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein, and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding is brought in an inconvenient forum or that the venue of such suit, action or proceeding is improper. Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law. Nothing contained herein shall be deemed or operate to preclude the Holder from bringing suit or taking other legal action against the Company in any other jurisdiction to collect on the Company’s obligations to the Holder, to realize on any collateral or any other security for such obligations, or to enforce a judgment or other court ruling in favor of the Holder. THE COMPANY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE TO, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION WITH OR ARISING OUT OF THIS NOTE OR ANY TRANSACTION CONTEMPLATED HEREBY.
16. SEVERABILITY. If any provision of this Note is prohibited by law or otherwise determined to be invalid or unenforceable by a court of competent jurisdiction, the provision that would otherwise be prohibited, invalid or unenforceable shall be deemed amended to apply to the broadest extent that it would be valid and enforceable, and the invalidity or unenforceability of such provision shall not affect the validity of the remaining provisions of this Note so long as this Note as so modified continues to express, without material change, the original intentions of the parties as to the subject matter hereof and the prohibited nature, invalidity or unenforceability of the provision(s) in question does not substantially impair the respective expectations or reciprocal obligations of the parties or the practical realization of the benefits that would otherwise be conferred upon the parties. The parties will endeavor in good faith negotiations to replace the prohibited, invalid or unenforceable provision(s) with a valid provision(s), the effect of which comes as close as possible to that of the prohibited, invalid or unenforceable provision(s).
| 7 |
17. MAXIMUM PAYMENTS. Nothing contained herein shall be deemed to establish or require the payment of a rate of interest or other charges in excess of the maximum permitted by applicable law. In the event that the rate of interest required to be paid or other charges hereunder exceed the maximum permitted by such law, any payments in excess of such maximum shall be credited against amounts owed by the Company to the Holder and thus refunded to the Company.
18. ASSIGNMENT. Neither this Note nor the rights contained herein may be assigned, by operation of law or otherwise, by either party without the prior written consent of the other; provided, however, that this Note and/or the rights contained herein may be assigned without the Company’s consent by the Holder to any other entity who controls, is controlled by or is under common control with the Holder.
19. CERTAIN DEFINITIONS. For purposes of this Note, the following words and terms shall have the following meanings:
(a) “Closing Date” shall mean the date the Company initially issued the Note
(b) “Common Stock” means (i) the Company’s shares of common stock, $0.001 par value per share, and (ii) any capital stock into which such Common Stock shall have been changed or any share capital resulting from a reclassification of such Common Stock.
(c) “Exchange Agreement” means that certain Exchange Agreement, dated as of November __, 2021, by and between the Company and the Holder.
(d) “Maturity Date” shall mean the date listed in the preamble hereto as the Maturity Date; provided, however, the Maturity Date may be extended at the option of the Holder in the event that, and for so long as, an Event of Default shall have occurred and be continuing or any event shall have occurred and be continuing that with the passage of time and the failure to cure would result in an Event of Default.
(e) “Person” means an individual, a limited liability company, a partnership, a joint venture, a corporation, a trust, an unincorporated organization, any other entity or a government or any department or agency thereof.
(f) “Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations thereunder.
(g) “Trading Day” means, as applicable, (x) with respect to all price or trading volume determinations relating to the Common Stock, any day on which the Common Stock is traded on the principal securities exchange or securities market on which the Common Stock is then traded, provided that “Trading Day” shall not include any day on which the Common Stock is scheduled to trade on such exchange or market for less than 4.5 hours or any day that the Common Stock is suspended from trading during the final hour of trading on such exchange or market (or if such exchange or market does not designate in advance the closing time of trading on such exchange or market, then during the hour ending at 4:00 p.m., New York time) unless such day is otherwise designated as a Trading Day in writing by the Holder or (y) with respect to all determinations other than price determinations relating to the Common Stock, any day on which The New York Stock Exchange (or any successor thereto) is open for trading of securities.
(h) “Transaction Documents” means this Note, the Exchange Agreement and any other documents relating to the issuance of this Note by the Company to the Holder.
[signature page follows]
| 8 |
IN WITNESS WHEREOF, the Company has caused this Note to be duly executed as of the Issuance Date set out above.
|
IMPERALIS HOLDING CORP. | ||
| By: /s/ VINCENT ANDREULA | ||
| Name: | Vincent Andreula | |
| Title: | Chief Executive Officer | |
| 9 |
EXHIBIT I
IMPERALIS HOLDING CORP.
CONVERSION NOTICE
Reference is made to the Convertible Promissory Note (the “Note”) issued to the undersigned by Imparlis Holding Corp., a Nevada corporation (the “Company”). In accordance with and pursuant to the Note, the undersigned hereby elects to convert the Conversion Amount (as defined in the Note) of the Note indicated below into shares of Common Stock, $0.001 par value per share (the “Common Stock”), of the Company, as of the date specified below. Capitalized terms not defined herein shall have the meaning as set forth in the Note.
Date of Conversion: |
|||||
Aggregate Principal to be converted: |
|||||
Aggregate accrued and unpaid Interest to be converted: |
|||||
AGGREGATE CONVERSION AMOUNT |
|||||
Please confirm the following information: | |||||
Conversion Price: |
|||||
Number of shares of Common Stock to be issued: |
|||||
|
☐ Check here if requesting delivery as a certificate to the following name and to the following address: | |||||
|
Issue to: |
|||||
☐ Check here if requesting delivery by Deposit/Withdrawal at Custodian as follows: | |||||
|
DTC Participant: |
|||||
|
DTC Number: |
|||||
|
Account Number: |
|||||
| 1 |
|
Date: ______________________ __,
|
||
| Name of Registered Holder | ||
|
By: |
||
| Name: | ||
| Title: | ||
| Tax ID:_____________________ | ||
|
Facsimile:___________________
|
||
| E-mail Address: | ||
2
Exhibit 10.1
EXCHANGE AGREEMENT
THIS EXCHANGE AGREEMENT (the “Agreement”) is made as of December 15, 2021 (the “Effective Date”), by and between Imperalis Holding Corp., a Nevada corporation (the “Company”) and Digital Power Lending, LLC, a California limited liability company (the “Investor”).
WHEREAS, the Investor acquired those certain Promissory Notes dated August 18, 2021 and November 5, 2021 (collectively, the “Original Note”) in the aggregate principal amount of $100,000, which Original Note has accrued interest of $1,528.77 as of the Effective Date;
WHEREAS, subject to the satisfaction of the conditions set forth herein, the Company and the Investor desire to enter into a transaction wherein the Company shall issue the Investor a new Convertible Promissory Note in the principal amount of $101,528.77 (the “Principal”, in the form attached hereto as Exhibit A (the “New Note”), in exchange for the Original Note.
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:
1. Exchange. The closing of the Exchange (the “Closing”) will occur on December 15, 2021 (or such later date as the parties hereto may agree in writing) following the satisfaction or waiver of the conditions set forth herein (such date, the “Closing Date”). On the Closing Date, subject to the terms and conditions of this Agreement, the Investor and the Company shall exchange the Original Note for the New Note. At the Closing, the following transactions shall occur (collectively, the “Exchange”):
1.1. On the Closing Date, the Company shall issue the New Note to the Investor. Promptly after the Closing Date, but in no event more than one day after the Closing Date, the Company shall deliver an executed original New Note to the Investor. On the Closing Date, the Investor shall be deemed for all purposes to have become the holder of record of the New Note, irrespective of the date the Company delivers the New Note to the Investor. Upon receipt of the executed original of the New Note in accordance with this Section 1.1, all of the Investor’s rights under the Original Note shall be extinguished (including, without limitation, the rights to receive, as applicable, any premium, make-whole amount, accrued and unpaid interest or dividends thereon or any other shares of the Common Stock of the Company with respect thereto).
1.2. It shall be a condition to the obligation of the Investor, on the one hand, and the Company, on the other hand, to consummate the Exchange contemplated hereunder that the other party’s representations and warranties contained herein are true and correct on the Closing Date with the same effect as though made on such date, unless waived in writing by the party to whom such representations and warranties are made.
2. Representations and Warranties of the Company. The Company hereby represents and warrants to the Investor that:
2.1 Organization. The Company is a corporation duly organized, validly existing and in good standing under the laws of the State of Nevada, with the requisite power and authority to own and use its properties and assets and to carry on its business as currently conducted. The Company is not in violation nor default of any of the provisions of its certificate of incorporation, bylaws or other organizational or charter documents. The Company is duly qualified to conduct business and is in good standing as a foreign corporation or other entity in each jurisdiction in which the nature of the business conducted or property owned by it makes such qualification necessary, and no claim, action or proceeding of any kind has been instituted in any such jurisdiction revoking, limiting or curtailing or seeking to revoke, limit or curtail such power and authority or qualification.
2.2 Authorization. This Agreement has been duly and validly authorized, executed and delivered on behalf of the Company and shall constitute the legal, valid and binding obligations of the Company enforceable against the Company in accordance with their respective terms, except as such enforceability may be limited by general principles of equity or to applicable bankruptcy, insolvency, reorganization, moratorium, liquidation and other similar laws relating to, or affecting generally, the enforcement of applicable creditors’ rights and remedies. The execution, delivery and performance by the Company of this Agreement and the consummation by the Company of the transactions contemplated hereby and thereby will not: (i) conflict with, or constitute a default (or an event which with notice or lapse of time or both would become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation of, any agreement, indenture or instrument to which the Company is a party or by which it is bound; or (ii) result in a violation of any law, rule, regulation, order, judgment or decree (including federal and state securities or “blue sky” laws) applicable to the Company.
2.3 Valid Issuance of the New Note. The New Note when issued and delivered in accordance with the terms of this Agreement, for the consideration expressed herein, and the Common Stock when issued in accordance with the terms of this Agreement will be duly and validly issued, fully paid and non-assessable, free and clear of all Liens imposed by the Company other than restrictions on transfer provided for in the Transaction Documents.
2.4 Issuance of Common Stock. Upon the issuance of any Common Stock pursuant to the terms of this Agreement and the New Note, the Common Stock shall be freely tradable under Section 3(a)(9) of the Securities Act of 1933 and Rule 144 thereunder as more fully described in the New Note.
2.5 Reservation of Common Stock.
2.5.1 So long as the New Note remains outstanding, the Company shall reserve 13,000,000 shares of Common Stock (the “Required Reserve Amount”) to be issued to the Investor in accordance with the terms set forth in the New Note.
2.5.2 If, notwithstanding Section 2.5.1, and not in limitation thereof, at any time while the New Note remains outstanding the Company does not have a sufficient number of authorized and unreserved shares of Common Stock to satisfy its obligation to reserve 5 million shares of its Common Stock for issuance pursuant to the terms of this Agreement, (an “Authorized Share Failure”), then the Company shall as practicable as possible take all action necessary to increase the Company’s authorized shares of Common Stock or effectuate a reverse split of the Common Stock to an amount sufficient to allow the Company to reserve the Required Reserve Amount. Without limiting the generality of the foregoing sentence, as soon as practicable after the date of the occurrence of an Authorized Share Failure, but in no event later than 60 days after the occurrence of such Authorized Share Failure, the Company shall hold a meeting of its stockholders for the approval of an increase in the number of authorized shares of Common Stock. In connection with such meeting, the Company shall provide each stockholder with a proxy statement and shall use its best efforts to solicit its stockholders’ approval of such increase in authorized shares of Common Stock and to cause its board of directors to recommend to the stockholders that they approve such proposal.
2.6 Compliance With Laws. The Company has complied in all material respects with all laws, rules, and regulations applicable to it and its business, and the Company has not received notice of any such violation.
2.7 Consents; Waivers. No consent, waiver, approval or authority of any nature, or other formal action, by any person or entity, not already obtained, is required in connection with the execution and delivery of this Agreement by the Company or the consummation by the Company of the transactions provided for herein and therein.
2.8 Acknowledgment Regarding Investor’s Purchase of the New Note. The Company acknowledges and agrees that the Investor is acting solely in the capacity of arm’s length purchaser with respect to this Agreement and the Exchange and the transactions contemplated hereby and thereby and that the Investor is not: (i) an officer or director of the Company; (ii) an “affiliate” of the Company (as defined in Rule 144 promulgated under the Securities Act); or (iii) to the knowledge of the Company, a “beneficial owner” of 4.99% or more of the shares of Common Stock (as defined for purposes of Rule 13d-3 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). The Company further acknowledges that the Investor is not acting as a financial advisor or fiduciary of the Company (or in any similar capacity) with respect to the Exchange, this Agreement, any other document or agreement delivered in connection herewith or therewith or the transactions contemplated hereby and thereby, and any advice given by the Investor or any of its representatives or agents in connection with the Exchange, this Agreement, any other document or agreement delivered in connection herewith or therewith or the transactions contemplated hereby and thereby is merely incidental to the Investor’s acceptance of the New Note. The Company further represents to the Investor that the Company’s decision to enter into the Exchange has been based solely on the independent evaluation by the Company and its representatives.
| 2 |
3. Representations and Warranties of the Investor. The Investor hereby represents, warrants and covenants that:
3.1. Organization. The Investor is a limited liability company duly organized, validly existing and in good standing under the laws of the State of California, with the requisite power and authority to own and use its properties and assets and to carry on its business as currently conducted. The Investor is not in violation nor default of any of the provisions of its certificate of limited partnership, limited partnership agreement or other organizational or charter documents. The Investor is duly qualified to conduct business and is in good standing as a foreign corporation or other entity in each jurisdiction in which the nature of the business conducted or property owned by it makes such qualification necessary, and no claim, action or proceeding of any kind has been instituted in any such jurisdiction revoking, limiting or curtailing or seeking to revoke, limit or curtail such power and authority or qualification.
3.2. Authorization. This Agreement has been duly and validly authorized, executed and delivered on behalf of the Investor and shall constitute the legal, valid and binding obligations of the Investor enforceable against the Investor in accordance with their respective terms, except as such enforceability may be limited by general principles of equity or to applicable bankruptcy, insolvency, reorganization, moratorium, liquidation and other similar laws relating to, or affecting generally, the enforcement of applicable creditors’ rights and remedies. The execution, delivery and performance by the Investor of this Agreement and the consummation by the Investor of the transactions contemplated hereby and thereby will not: (i) conflict with, or constitute a default (or an event which with notice or lapse of time or both would become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation of, any agreement, indenture or instrument to which the Investor is a party or by which it is bound; or (ii) result in a violation of any law, rule, regulation, order, judgment or decree (including federal and state securities or “blue sky” laws) applicable to the Investor.
3.3. Accredited Investor Status; Investment Experience. The Investor is an “accredited investor” as that term is defined in Rule 501(a) of Regulation D. The Investor can bear the economic risk of its investment in the New Note, and has such knowledge and experience in financial and business matters that it is capable of evaluating the merits and risks of an investment in the New Note.
3.4. No Governmental Review. The Investor understands that no United States federal or state agency or any other government or governmental agency has passed on or made any recommendation or endorsement of the New Note or the fairness or suitability of the investment in the New Note nor have such authorities passed upon or endorsed the merits of the offering of the New Note.
3.5. Ownership of Securities. The Investor owns and holds, beneficially and of record, the entire right, title, and interest in and to the Original Note free and clear of all rights and liens (other than pledges or security interests (x) arising by operation of applicable securities laws and (y) that the Investor may have created in favor of a prime broker under and in accordance with its prime brokerage agreement with such broker). The Investor has full power and authority to transfer and dispose of the Original Note to the Company free and clear of any right or lien. Other than the transactions contemplated by this Agreement, there is no outstanding, plan, pending proposal, or other right of any person or entity to acquire all or any part of the Original Note or any shares of Common Stock issuable upon the delivery of the Conversion Notice and corresponding deduction of the face amount of the New Note.
4. Additional Covenants
4.1. Blue Sky. The Company shall make all filings relating to the Exchange required by Regulation D under the Securities Act and under applicable securities or “blue sky” laws of the states of the United States following the date hereof.
4.2. Fees and Expenses. Each party to this Agreement shall pay the fees and expenses of its advisers, counsel, accountants and other experts, if any, and all other expenses incurred by such party incident to the negotiation, preparation, execution, delivery and performance of this Agreement.
| 3 |
4.3. Noncircumvention. The Company hereby covenants and agrees that the Company will not, by amendment of the Company’s certificate of incorporation or other charter documents, bylaws or through any reorganization, transfer of assets, consolidation, merger, scheme of arrangement, dissolution, issue or sale of securities, or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Agreement, and will at all times in good faith carry out all of the provisions of this Agreement take all action as may be required to protect the rights of the Investor under this Agreement. Without limiting the generality of the foregoing or any other provision of this Agreement, the Company (a) shall not increase the par value of any shares of Common Stock issuable pursuant to the terms of this Agreement above the Conversion Price (as defined in the New Note) then in effect, and (b) shall take all such actions as may be necessary or appropriate in order that the Company may validly and legally issue fully paid and non-assessable shares of Common Stock upon issuance of such Common Stock to the Investor pursuant to the terms of this Agreement. Notwithstanding anything herein to the contrary, if at any time the Investor is not permitted receive all the shares of Common Stock the Investor is entitled to receive pursuant to the terms of this Agreement for any reason, the Company shall use its best efforts to promptly remedy such failure, including, without limitation, obtaining such consents or approvals as necessary to permit the issuance of such shares of Common Stock.
5. Miscellaneous
5.1. Successors and Assigns. Except as otherwise provided herein, the terms and conditions of this Agreement shall inure to the benefit of and be binding upon the parties hereto and the respective successors and assigns of the parties. Nothing in this Agreement, express or implied, is intended to confer upon any party, other than the parties hereto or their respective successors and assigns, any rights, remedies, obligations or liabilities under or by reason of this Agreement, except as expressly provided in this Agreement.
5.2. Governing Law; Exclusive Jurisdiction. All questions concerning the construction, validity, enforcement and interpretation of this Agreement shall be governed by the internal laws of the State of Nevada, without giving effect to any choice of law or conflict of law provision or rule (whether of the State of Nevada or any other jurisdictions) that would cause the application of the laws of any jurisdictions other than the State of Nevada. Each party hereby irrevocably submits to the exclusive jurisdiction of the state or federal courts sitting in Clark County, Nevada, for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein, and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding is brought in an inconvenient forum or that the venue of such suit, action or proceeding is improper. Each of the parties hereby waives any objection to such exclusive jurisdiction and that such courts represent an inconvenient forum.
5.3. Notices. All notices, offers, acceptance and any other acts under this Agreement (except payment) shall be in writing, and shall be sufficiently given if delivered to the addressees in person, by FedEx or similar overnight next business day delivery, or by email followed by overnight next business day delivery, to the address as provided for on the signature page to this agreement.
5.4. Amendments and Waivers. Any term of this Agreement may be amended and the observance of any term of this Agreement may be waived (either generally or in a particular instance and either retroactively or prospectively), only with the written consent of the Company and the Investor.
5.5. Severability. If one or more provisions of this Agreement are held to be unenforceable under applicable law, such provision shall be excluded from this Agreement and the balance of the Agreement shall be interpreted as if such provision were so excluded and shall be enforceable in accordance with its terms so long as this Agreement as so modified continues to express, without material change, the original intentions of the parties as to the subject matter hereof and the prohibited nature, invalidity or unenforceability of the provision(s) in question does not substantially impair the respective expectations or reciprocal obligations of the parties or the practical realization of the benefits that would otherwise be conferred upon the parties. The parties will endeavor in good faith negotiations to replace the prohibited, invalid or unenforceable provision(s) with a valid provision(s), the effect of which comes as close as possible to that of the prohibited, invalid or unenforceable provision(s).
| 4 |
5.6. Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.
6. Definitions. For purposes of this Agreement, the following words and terms shall have the following meanings:
6.1. “Conversion Shares” shall have the meaning ascribed thereto in the New Note.
6.2. “Liens” means a lien, charge, pledge, security interest, encumbrance, right of first refusal, preemptive right or other restriction.
6.3. “Person” means an individual, a limited liability company, a partnership, a joint venture, a corporation, a trust, an unincorporated organization, any other entity or a government or any department or agency thereof.
6.4. “Transaction Documents” means this Agreement, the New Note, and all exhibits and schedules thereto and hereto and any other documents or agreements executed in connection with the transactions contemplated hereunder.
[SIGNATURES ON THE FOLLOWING PAGE]
| 5 |
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed and delivered as of the date provided above.
|
COMPANY:
| |
|
IMPERALIS HOLDING CORP.
| |
| By: /s/ VINCENT ANDREULA | |
|
Name: Vincent Andreula Title: Chief Executive Officer |
Address for Notices:
| 6 |
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed and delivered as of the date provided above.
| INVESTOR: | |
| DIGITAL POWER LENDING, LLC | |
| By: /s/ DAVID J. KATZOFF | |
| Name: David J. Katzoff | |
| Title: Manager | |
| Address for Notices: | |
| Email: | |
| EIN#: |
| 7 |
EXHIBIT A
Convertible Promissory Note
Exhibit 99.1
STOCK PURCHASE AGREEMENT
This Stock Purchase Agreement (this “Agreement”), dated as of December 16, 2021, is by and among certain of the shareholders of Imperalis Holdings Corp., a Nevada corporation (“IMHC”), who are signatories hereto (each, a “Seller”, and collectively, the “Sellers”); and BitNile, Inc., a Nevada corporation (the “Purchaser”). Each of the parties to this Agreement is individually referred to herein as a “Party” and collectively as the “Parties.”
BACKGROUND
WHEREAS, the Sellers collectively are the record and beneficial owners of that number of shares (the “Shares”) of common stock, $0.001 par value (the “Common Stock”) of IMHC, representing not less than eighty percent (80%) of the issued and outstanding shares of IMHC, with each Seller owning such number of shares of Common Stock as set forth on Schedule 1.01 hereto;
WHEREAS, the Purchaser desires to purchase the Shares, and each Seller desires to sell such Shares to the Purchaser, upon the terms and subject to the conditions set forth herein.
WHEREAS, the Purchaser has proposed to acquire the Shares pursuant to a transaction (the “Acquisition”) whereby, pursuant to the terms and subject to the conditions of this Agreement, the Sellers shall sell the Shares to the Purchaser for an aggregate of $200,000 (the “Purchase Price”), with each Seller receiving such amount of the Purchase Price as set forth on Schedule 1.01 hereto;
WHEREAS, the obligation of the Parties to effect the Acquisition is subject to the conditions set forth in Article V hereof; and
WHEREAS, the Parties are executing and delivering this Agreement in reliance upon the exemption from securities registration afforded by the provisions of Section 4(a)(1) of the Securities Act of 1933, as amended (the “Securities Act”).
AGREEMENT
NOW THEREFORE, in consideration of the foregoing and the respective representations, warranties, covenants and agreements set forth herein, and intending to be legally bound hereby, the Parties agree as follows:
ARTICLE I
Stock Purchase
SECTION 1.01. Sale and Purchase. At the Closing (as defined in Section 1.02), and subject to the terms and conditions hereof, Sellers agree to sell, assign, transfer, convey and deliver to Purchaser with full title guarantee, and Purchaser agrees to purchase from Sellers, all and not less than all of the Shares. The Sellers shall convey the Shares to the Purchaser free and clear of all liens, security interests, adverse claims or any and all claims, liabilities and obligations and free and clear of any and all liens, pledges, charges, mortgages, security interests, restrictions, leases, licenses, easements, liabilities, claims, encumbrances, preferences, priorities or rights of others of every kind and description (“Encumbrances”), other than restrictions under applicable securities laws. In exchange for the Shares, the Sellers shall receive the Purchase Price as set forth on Schedule 1.01 hereto.
| 1 |
SECTION 1.02. Closing. The closing (the “Closing”) of the transaction contemplated by this Agreement (the “Transaction”) shall take place at the offices of The Crone Law Group P.C., 1 East Liberty Street, Suite 600, Reno, Nevada, commencing upon the satisfaction or waiver of all conditions and obligations of the Parties to consummate the Transaction contemplated hereby (other than conditions and obligations with respect to the actions that the respective Parties will take at Closing) or such other date and time as the Parties may mutually determine (the “Closing Date”).
SECTION 1.03. Escrow of Purchase Price and Shares; Escrow Agreement. Concurrently with the Parties’ execution of this Agreement, the Sellers and the Purchaser, together with The Crone Law Group, P.C. (the “Escrow Agent”), shall enter into the Escrow Agreement attached hereto as Exhibit A. At or before the Closing, the Sellers shall deliver the Shares and other documents described in Section 4.01(ii), (iii) and (iv) below to the Escrow Agent and the Purchaser shall deposit the Purchase Price into the Escrow Agent’s escrow account (the “Escrow Account”), as consideration to be used for the purchase of the Shares (the “Escrowed Funds”). Payment of the Escrowed Funds shall be made by wire transfer of immediately available funds into the Escrow Account pursuant to wire instructions delivered to the Purchaser by the Escrow Agent, to be further released to the Sellers upon satisfaction or waiver of all conditions for release as set forth in the Escrow Agreement.
SECTION 1.04. Outside Date. If Closing has not occurred by December 31, 2021, the Escrow Agreement shall provide that the Escrow Agent shall immediately return the Shares and any other documents described in Section 4.01(ii), (iii) and (iv) to the Sellers and the Purchase Price to the Purchaser which have been delivered to the Escrow Agent.
ARTICLE II
Representations and Warranties of the Sellers
The Sellers hereby jointly and severally represent and warrant to the Purchaser as follows that, except as specifically referenced on a disclosure schedule (the “IMHC Disclosure Schedules”):
SECTION 2.01. Good Title. The Sellers are the true and lawful registered holders and beneficial owners of the Shares, and have good title to the Shares, all of which Shares are free and clear of all Encumbrances, other than as provided under applicable securities laws. Upon consummation of the Acquisition delivery of any certificate or certificates duly endorsed for transfer to the Purchaser, representing the same as herein contemplated and/or upon registering of the Purchaser as the new owner of the Shares in the share register of IMHC, the Purchaser will receive good and valid title to the Shares, free and clear of all Encumbrances, other than as provided under applicable securities laws. Other than the rights and obligations arising under this Agreement, none of the Shares is subject to any rights of any other person to acquire the same. No Seller is a party to any option, warrant, purchase right, or other contract or commitment that could require it to sell, transfer, or otherwise dispose of the Shares (other than pursuant to this Agreement) nor is it a party to any voting trust, proxy, or other agreement or understanding with respect to the voting of any of the Shares.
| 2 |
SECTION 2.02. Organization, Standing and Power of IMHC. IMHC is duly organized, validly existing and in good standing under the laws of the State of Nevada and has the corporate power and authority to carry on its business as it is now being conducted and possesses all governmental franchises, licenses, permits, authorizations and approvals necessary to enable it to own, lease or otherwise hold its properties and assets and to conduct its businesses as presently conducted, other than such franchises, licenses, permits, authorizations and approvals the lack of which, individually or in the aggregate, has not had and would not reasonably be expected to have a material adverse effect on IMHC (an “IMHC Material Adverse Effect”). IMHC is duly qualified to do business in each jurisdiction where the nature of its business or its ownership or leasing of its properties make such qualification necessary except where the failure to so qualify would not reasonably be expected to have an IMHC Material Adverse Effect. Sellers have delivered to the Purchaser true and complete copies of the Articles of Incorporation and Bylaws of IMHC and such other constituent instruments of IMHC as may exist, each as amended to the date of this Agreement (as so amended, the “IMHC Constituent Instruments”).
SECTION 2.03. Authority. IMHC has the corporate power and the authority to execute, deliver and perform this Agreement and each other document contemplated by this Agreement. The execution, delivery and performance of this Agreement by IMHC have been duly authorized by its board of directors. No other corporate proceedings on the part of IMHC are necessary to authorize the execution, delivery and performance of this Agreement. This Agreement has been duly executed and delivered by IMHC and, assuming due execution and delivery hereof by the Purchaser, is a valid and legally binding agreement of IMHC, enforceable in accordance with its terms, subject to bankruptcy, insolvency, moratorium, reorganization and similar laws of general applicability relating to or affecting creditors’ rights, to general equity principles, and public policy considerations underlying the securities laws, to the extent that such public policy considerations limit the enforceability of the provisions of this Agreement that purport to provide indemnification for securities laws liabilities.
SECTION 2.04. Capital Structure. IMHC’s authorized capital consists of 200,000,000 shares of common stock, par value $0.001 per share, of which 143,037,383 shares are issued and outstanding as of the date of this Agreement. Except as set forth above or in Schedule 2.04 hereto, no other shares of capital stock or other voting securities of IMHC are issued, reserved for issuance or outstanding, other than 20,000 shares of Series E Preferred Stock, none of which are issued or outstanding. All outstanding shares of the capital stock of IMHC are duly authorized, validly issued, fully paid and nonassessable and not subject to or issued in violation of any purchase option, call option, right of first refusal, preemptive right, subscription right or any similar right under any provision of the applicable corporate laws of Nevada, the IMHC Constituent Instruments or any Contract (as defined in Section 2.05) to which IMHC is a party or otherwise bound. There are no bonds, debentures, notes or other indebtedness of IMHC having the right to vote (or convertible into, or exchangeable for, securities having the right to vote) on any matters on which holders of IMHC Shares may vote (“Voting IMHC Debt”). As of the date of this Agreement, except as set forth on Schedule 2.04 hereto, there are not any options, warrants, rights, convertible or exchangeable securities, “phantom” stock rights, stock appreciation rights, stock-based performance units, commitments, Contracts, arrangements or undertakings of any kind to which IMHC is a party or by which any of them is bound (a) obligating IMHC to issue, deliver or sell, or cause to be issued, delivered or sold, additional shares of capital stock or other equity interests in, or any security convertible or exercisable for or exchangeable into any capital stock of or other equity interest in, IMHC or any Voting IMHC Debt, (b) obligating IMHC to issue, grant, extend or enter into any such option, warrant, call, right, security, commitment, Contract, arrangement or undertaking or (c) that give any person the right to receive any economic benefit or right similar to or derived from the economic benefits and rights occurring to holders of the capital stock of IMHC. As of the date of this Agreement, there are no outstanding contractual obligations of IMHC to repurchase, redeem or otherwise acquire any shares of capital stock of IMHC. To IMHC’s knowledge, the offer and sale of all capital stock, convertible securities, rights, warrants, or options of IMHC issued prior to the Closing complied with all applicable federal and state securities laws and IMHC has not been notified by the Securities and Exchange Commission (the “SEC”), the OTC Markets, FINRA, any state securities commission or any other Governmental Authority of the absence of compliance by IMHC with any federal and state securities laws or other legal requirements. For purposes hereof, “Governmental Authority” means any nation or country (including but not limited to the United States) and any commonwealth, territory or possession thereof and any government or governmental or regulatory, legislative, executive authority thereof, or commission, department or political subdivision thereof, whether federal, state, regional, municipal, local or foreign, or any department, board, bureau, agency, instrumentality or authority thereof, or any court or arbitrator (public or private), including, but not limited to, the Securities and Exchange Commission and FINRA. No shareholder has a matured and/or unmatured right of rescission or claim for damages with respect thereto.
| 3 |
SECTION 2.05. No Conflicts; Consents.
(a) The execution and delivery by Sellers of this Agreement does not, and the consummation of the Transaction and compliance with the terms hereof and thereof will not, conflict with, or result in any violation of or default (with or without notice or lapse of time, or both) under, or give rise to a right of termination, cancellation or acceleration of any obligation or to loss of a material benefit under, or result in the creation of any Encumbrance upon the Shares, properties or assets of IMHC under any provision of (a) the IMHC Constituent Instruments, (b) any material contract, lease, license, indenture, note, bond, agreement, permit, concession, franchise or other instrument (a “Contract”) to which IMHC is a party or by which any of its properties or assets are bound or (c) any material judgment, order or decree (“Judgment”) or material law applicable to IMHC or its properties or assets, other than, in the case of clauses (b) and (c) above, any such items that, individually or in the aggregate, have not had and would not reasonably be expected to have an IMHC Material Adverse Effect.
(b) No material consent, approval, license, permit, order or authorization (“Consent”) of, or registration, declaration or filing with, or permit from, any governmental entity is required to be obtained or made by or with respect to Sellers in connection with the execution, delivery and performance of this Agreement or the consummation of the Transaction, other than the filing of a Current Report on Form 8-K with the SEC and the filing of a Schedule 14f-1 with the SEC and distributed to the shareholders of IMHC.
| 4 |
SECTION 2.06. Taxes.
(a) IMHC has timely filed all Tax Returns required to be filed by it, and all such Tax Returns are true, complete and accurate, except to the extent any failure to file or any inaccuracies in any filed Tax Returns, individually or in the aggregate, have not had and would not reasonably be expected to have an IMHC Material Adverse Effect. All Taxes shown to be due on such Tax Returns, or otherwise owed, have been timely paid, except to the extent that any failure to pay, individually or in the aggregate, has not had and would not reasonably be expected to have an IMHC Material Adverse Effect. There are no unpaid taxes in any material amount claimed to be due by the taxing authority of any jurisdiction, and the Sellers know of no basis for any such claim. No tax audit is in process or threatened and IMHC has not received a notice of assessment from any tax authority indicating a tax assessment or recalculation of any taxes in any tax return previously filed.
(b) For purposes of this Agreement:
“Taxes” includes all forms of taxation, whenever created or imposed, and whether of the United States or elsewhere, and whether imposed by a local, municipal, governmental, state, provincial, foreign, federal or other governmental entity, or in connection with any agreement with respect to Taxes, including all interest, penalties and additions imposed with respect to such amounts.
“Tax Return” means all federal, state, provincial, local, provincial and foreign Tax returns, declarations, statements, reports, schedules, forms and information returns and any amended Tax return relating to Taxes.
SECTION 2.07. Benefit Plans. IMHC does not have or maintain any collective bargaining agreement or any bonus, pension, profit sharing, deferred compensation, incentive compensation, share ownership, share purchase, share option, phantom stock, retirement, vacation, severance, disability, death benefit, hospitalization, medical or other plan, arrangement or understanding (whether or not legally binding) providing benefits to any current or former employee, officer or director of IMHC (collectively, “IMHC Benefit Plans”). As of the date of this Agreement there are no severance or termination agreements or arrangements between IMHC and any current or former employee, officer or director of IMHC, nor does IMHC have any general severance plan or policy.
SECTION 2.08. 1Litigation. There is no action, suit, inquiry, notice of violation, proceeding (including any partial proceeding such as a deposition) or investigation pending or threatened in writing against or affecting IMHC, the Sellers, or any of their respective properties before or by any court, arbitrator, governmental or administrative agency, regulatory authority (federal, state, provincial, county, local or foreign), stock market, stock exchange or trading facility (“Action”) that (i) adversely affects or challenges the legality, validity or enforceability of any of this Agreement or the Shares or (ii) could, if there were an unfavorable decision, individually or in the aggregate, have or reasonably be expected to result in an IMHC Material Adverse Effect. Neither IMHC, nor any director or officer thereof (in his or her capacity as such), is or has been the subject of any Action involving a claim or violation of or liability under federal, state or provincial securities laws or a claim of breach of fiduciary duty.
| 5 |
SECTION 2.09. Compliance with Applicable Laws. IMHC is in compliance with all applicable laws, including those relating to occupational health, labor and safety and the environment, except for instances of noncompliance that, individually and in the aggregate, have not had and would not reasonably be expected to have an IMHC Material Adverse Effect. IMHC has not received any written communication during the past two years from a governmental entity that alleges that IMHC is not in compliance in any material respect with any applicable law. This Section 2.09 does not relate to matters with respect to Taxes, which are the subject of Section 2.06.
SECTION 2.10. Contracts. IMHC is not in violation of or in default under (nor does there exist any condition which upon the passage of time or the giving of notice would cause such a violation of or default under) any Contract to which it is a party or by which it or any of its properties or assets is bound, except for violations or defaults that would not, individually or in the aggregate, reasonably be expected to result in an IMHC Material Adverse Effect. All Contracts have been filed as exhibits to the IMHC SEC Documents (as hereinafter defined).
SECTION 2.11. Solvency. Based on the financial condition of IMHC as of the Closing Date (and assuming that the Closing shall have occurred), IMHC is not insolvent or bankrupt and it has not filed for protection under applicable law. Moreover, there has been no petition in bankruptcy filed by IMHC or against IMHC.
SECTION 2.12. Application of Takeover Protections. IMHC is not subject to any control share acquisition, business combination, poison pill (including any distribution under a rights agreement) or other similar anti-takeover provision under IMHC’s Constituent Instruments or the laws of its jurisdiction of formation that is or could become applicable to the Sellers as a result of the Sellers fulfilling their obligations or exercising their rights under this Agreement, including, without limitation, the transfer of and the Purchaser’s acquisition of the Shares.
SECTION 2.13. No Additional Agreements. IMHC does not have any agreement or understanding with the Sellers with respect to the Transaction other than as provided herein.
SECTION 2.14. Investment Company. IMHC is currently not, and immediately following the Closing will not have become, an “investment company” within the meaning of the Investment Company Act of 1940, as amended.
SECTION 2.15. IMHC SEC Documents.
(a) IMHC has filed all reports, schedules, forms, statements and other documents with the SEC and publicly available prior to the date of the Agreement (the “IMHC SEC Documents”) that were required to be filed pursuant to Sections 13 and 15 of the Exchange Act, as applicable, since the effective date of its most recent Registration Statement on Form 10.
(b) As of its respective filing date, each IMHC SEC Document complied in all material respects with the requirements of the Exchange Act and the rules and regulations of the SEC promulgated thereunder applicable to such IMHC SEC Document, and did not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading. The financial statements of IMHC included in the IMHC SEC Documents comply as to form in all material respects with applicable accounting requirements and the published rules and regulations of the SEC with respect thereto, have been prepared in accordance with the U.S. generally accepted accounting principles (“GAAP”) (except, in the case of unaudited statements, as permitted by the rules and regulations of the SEC) applied on a consistent basis during the periods involved (except as may be indicated in the notes thereto) and fairly present the financial position of IMHC as of the dates thereof and the results of its operations and cash flows for the periods shown (subject, in the case of unaudited statements, to normal year-end audit adjustments).
| 6 |
(c) Except as set forth in the IMHC SEC Documents, or as disclosed in the IMHC Disclosure Schedule, IMHC has no liabilities or obligations of any nature (whether accrued, absolute, contingent or otherwise) required by GAAP to be set forth on a balance sheet of IMHC or in the notes thereto. The IMHC SEC Documents, and the IMHC Disclosure Schedule, if applicable, sets forth all financial and contractual obligations and liabilities (including any obligations to issue capital stock or other securities of IMHC) due after the date hereof.
SECTION 2.16. Sellers Power and Authority. All acts required to be taken by the Sellers to enter into this Agreement and to carry out the Transaction have been properly taken. This Agreement has been duly and validly executed and delivered by the Sellers and constitutes a valid and binding agreement of such party, enforceable against such party in accordance with its terms.
SECTION 2.17. No Violation. The Sellers are not subject to, or obligated under, any charter, bylaw or contractual provision or any license, franchise or permit, or subject to any statute, regulation, rule, injunction, ruling, order or decree or other restriction, that, by its terms, would be breached or violated or would result in a default under (with or without notice or lapse of time or both), or result in the imposition of a Encumbrance or would accelerate any payment or obligation, trigger any right of first refusal or other purchase right as a result of any Seller executing or carrying out the transactions contemplated by this Agreement. No authorization, consent or approval of, or filing with, any Governmental Authority or third party is necessary for the consummation by the Seller of the transactions contemplated by this Agreement.
SECTION 2.18. No Conflicts. The execution and delivery of this Agreement by the Sellers and the consummation of the transactions contemplated hereby do not and shall not, with or without the giving of notice or the passage of time, (i) violate, conflict with, or result in a breach of, or a default or loss of rights under, any material covenant, agreement, mortgage, indenture, lease, instrument, permit or license to which any Seller is a party or by which any Seller or any of the Shares are bound, or any judgment, order, decree, law, rule or regulation to which any Seller or such Shares are subject or (ii) result in the creation of, or give any party any right to create, any Encumbrance or any other right or adverse interest upon any of such Shares.
SECTION 2.19. Consents; Permits; Defaults. Assuming the accuracy of the representations and warranties of the Purchaser in Article III, other than as contemplated in this Agreement, none of the execution, delivery or performance of this Agreement by IMHC, the consummation by the Seller of the Acquisition or any other transaction contemplated by this Agreement, or compliance by IMHC with any of the provisions of this Agreement will require (with or without notice or lapse of time, or both) any consent, approval, authorization or permit of, or filing or registration with or notification to, any Governmental Authority or any other Person, other than the filing of a Current Report on Form 8-K with the SEC and the filing of a Schedule 14f-1 with the SEC and distributed to the shareholders of IMHC.
| 7 |
SECTION 2.20. Compliance with Laws. In the last five (5) years, the Sellers have not received any written communication from a Governmental Authority that alleges that IMHC is not in compliance with any federal, state, local or foreign laws, ordinances and regulations or has not made all of the filings required by all such authorities, organizations and agencies.
SECTION 2.21. Disclosure of Material Information. The Sellers have not provided the Purchaser or its agents or counsel with any information that it believes constitutes material non-public information (other than with respect to the transaction). The Sellers understand and confirm that the Purchaser will be relying on the foregoing representations in effecting transactions in securities of the Company.
SECTION 2.22. Bad Actor. Neither the Sellers, nor any person receiving remuneration or a commission for participating in the offering and sale of the Shares, is (i) subject to a "bad actor" disqualification (under Rule 506(d)(1) or certain other statutory disqualifications) or (ii) subject to a statutory disqualification described under section 3(a)(39) of the Securities Exchange Act of 1934.
SECTION 2.23. Broker. The Sellers have not retained any broker in connection with any transaction contemplated by this Agreement. The Purchaser shall not be obligated to pay any fee or commission associated with the retention or engagement by the Sellers of any broker in connection with any transaction contemplated by this Agreement.
SECTION 2.24. Disclosure. No representation or warranty by the Sellers in this Agreement, the Exhibits or the IMHC Disclosure Schedules hereto and thereto and no statement contained in any document, certificate, or other writing furnished or to be furnished by IMHC and/or the Sellers to the Purchaser or any of its representatives or agents pursuant to the provisions hereof or in connection with the Acquisition, contains or will contain any untrue statement of material fact or omits or will omit to state any material fact necessary in order to make the statements herein or therein made, in the light of the circumstances under which they were made, not misleading.
ARTICLE III
Representations and Warranties of Purchaser
SECTION 3.01. Purchase Entirely for Own Account. The Shares proposed to be acquired by the Purchaser hereunder will be acquired for investment for its own account, and not with a view to the resale or distribution of any part thereof, and the Purchaser has no present intention of selling or otherwise distributing the Shares, except in compliance with applicable securities laws. The Purchaser is not subject to a disqualification of the type generally described in Rule 506(d) under the Securities Act.
SECTION 3.02. Reserved.
SECTION 3.03. Investor Status. The Purchaser is an “accredited investor” as such term is defined in rule 501(a) promulgated under the Securities Act of 1933. The Purchaser and/or its management have such knowledge, skills and experience in business, financial and investment matters that it is capable of evaluating the merits and risks of an investment in the Shares.
| 8 |
SECTION 3.04. Securities Risks. The Purchaser understands and accepts that the acquisition of the Shares involves various risks and uncertainties, and Purchaser represents that it is able to bear any loss associated with an investment in the Shares.
SECTION 3.05. Independent Evaluation of Investment. With the assistance of Purchaser’s own professional advisors, to the extent that Purchaser has deemed appropriate, Purchaser has made its own legal, tax, accounting and financial evaluation of the merits and risks of an investment in the Shares. Purchaser confirms that it is not relying on any communication (written or oral) of Sellers, as investment or tax advice or as a recommendation to the terms and conditions of the Shares provided in this Agreement or otherwise by Sellers will not be considered investment or tax advice or a recommendation to acquire the Shares. In accepting the shares, Purchaser has made its own independent decisions that an investment in the Shares is suitable and appropriate for Purchaser.
SECTION 3.06. IMHC Information. Purchaser is familiar with the business, capital structure, ownership and financial condition of IMHC based on IMHC’s filings with the SEC, transfer records of IMHC’s transfer agent delivered to it by Sellers, and such other records and information as Purchaser has deemed necessary to review. Purchaser has had access to such information concerning IMHC and the Shares and confirm it has been offered the opportunity to ask questions of Sellers and receive answers thereto as it deems necessary to enable it to make an informed investment decision concerning the acquisition of the Shares.
SECTION 3.07. Non-Registration. The Purchaser understands that the Shares have not been registered under the Securities Act and, if transferred in accordance with the provisions of this Agreement, will be sold by reason of a specific exemption from the registration provisions of the Securities Act that depends upon, among other things, the bona fide nature of the investment intent and the accuracy of the Purchaser’s representations as expressed herein.
SECTION 3.08. Restricted Securities. The Purchaser understands that the Shares are “restricted securities” under the Securities Act inasmuch as this Agreement contemplates that, if acquired by the Purchaser pursuant hereto, the Shares would be acquired in a transaction not involving a public offering. The Purchaser further acknowledges that if the Shares are transferred to the Purchaser in accordance with the provisions of this Agreement, the Shares may not be resold without registration under the Securities Act or the existence of an exemption therefrom. The Purchaser represents that it are familiar with Rule 144 promulgated under the Securities Act, as presently in effect, and understands the resale limitation imposed thereby and by the Securities Act.
SECTION 3.09. Legends. It is understood that the Shares will bear the following legend or another legend that is similar to the following:
THESE SECURITIES HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO IMHC. THESE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT SECURED BY SUCH SECURITIES.
and any legend required by the “blue sky” laws of any state to the extent such laws are applicable to the securities represented by the certificate so legended.
| 9 |
SECTION 3.10 Organization, Standing and Power of Purchaser. Purchaser is duly organized, validly existing and in good standing under the laws of the State of Nevada.
SECTION 3.11 Authority. Purchaser has the corporate power and the authority to execute, deliver and perform this Agreement and each other document contemplated by this Agreement. The execution, delivery and performance of this Agreement by Purchaser have been duly authorized. No other proceedings on the part of Purchaser are necessary to authorize the execution, delivery and performance of this Agreement. This Agreement has been duly executed and delivered by Purchaser and, assuming due execution and delivery hereof by the Sellers and IMHC, is a valid and legally binding agreement of Purchaser, enforceable in accordance with its terms, subject to bankruptcy, insolvency, moratorium, reorganization and similar laws of general applicability relating to or affecting creditors’ rights, to general equity principles, and public policy considerations underlying the securities laws.
SECTION 3.12 Consents. No consent, approval, license, permit, order or authorization of, or registration, declaration or filing with, or permit from, any governmental entity is required to be obtained or made by or with respect to Purchaser in connection with the execution, delivery and performance of this Agreement or the consummation of the Transaction.
SECTION 3.13 Litigation. There is no action, suit, inquiry, notice of violation, proceeding (including any partial proceeding such as a deposition) or investigation pending or threatened in writing against or affecting the Purchaser that adversely affects or challenges the legality, validity or enforceability of this Agreement.
ARTICLE IV
Deliveries
SECTION 4.01. Deliveries of the Sellers.
(a) Concurrently herewith the Sellers are delivering to the Purchaser a copy of this Agreement and the Escrow Agreement executed by the Sellers.
| 10 |
(b) At or prior to the Closing, each Seller shall deliver to the Escrow Agent for the benefit of Purchaser:
| (i) | certificates representing its Shares; |
| (ii) | a duly executed and medallion guaranteed share transfer power for transfer by the Sellers of the Shares to the Purchaser and otherwise in good form for transfer; |
| (iii) | the resignations of all officers of IMHC from all positions with IMHC, as of the Closing Date; |
| (iv) | confirmation of satisfaction of the convertible promissory notes issued to Intermarket Associates, LLC on May 22, 2019 and October 18, 2019, in a form satisfactory to Purchaser; |
| (v) | the resignation of the current sole director of IMHC, to be effective on the eleventh day after the mailing of the Schedule 14f-1 to the shareholders of IMHC; |
| (vi) | the unanimous written consent of the current Board of Directors of IMHC appointing one or more designees of the Purchaser to IMHC’s board of directors and executive officer positions; |
| (vii) | an officer and secretary’s certificate from IMHC; |
| (viii) | a Sellers’ certificate from the Sellers; and |
| (ix) | Such other documents as may be reasonably requested by the Purchaser and necessary to affect the Closing. |
SECTION 4.02. Deliveries of the Purchaser.
(a) Concurrently herewith, the Purchaser is delivering to the Sellers a copy of this Agreement and the Escrow Agreement executed by the Purchaser.
(b) On or before the Closing, the Purchaser shall deliver to the Escrow Agent the full Purchase Price to be held in escrow under the terms of the Escrow Agreement and to be further released in accordance with the terms thereof.
| 11 |
ARTICLE V
Conditions to Closing
SECTION 5.01. Sellers Conditions Precedent. The obligations of the Sellers to enter into and complete the Closing is subject, at the option of the Sellers, to the fulfillment on or prior to the Closing Date of the following conditions, any one or more of which may be waived by the Sellers in writing.
(a) Representations and Covenants. The representations and warranties of the Purchaser contained in this Agreement shall be true in all material respects on and as of the Closing Date with the same force and effect as though made on and as of the Closing Date. The Purchaser shall have performed and complied in all material respects with all covenants and agreements required by this Agreement to be performed or complied with by the Purchaser on or prior to the Closing Date.
(b) Litigation. No action, suit or proceeding shall have been instituted before any court or governmental or regulatory body or instituted or threatened by any governmental or regulatory body to restrain, modify or prevent the carrying out of the Transaction or to seek damages or a discovery order in connection with such Transaction.
(c) Deliveries. The deliveries specified in Section 4.02 shall have been made by the Purchaser.
SECTION 5.02. Purchaser Conditions Precedent. The obligations of the Purchaser to enter into and complete the Closing are subject, at the option of the Purchaser, to the fulfillment on or prior to the Closing Date of the following conditions, any one or more of which may be waived by the Purchaser in writing.
(a) Regulatory Consents, Authorizations, etc. All consents, authorizations, orders and approvals of, and filings and registrations with, any Governmental Authority which are required for or in connection with the execution and delivery of this Agreement and the consummation by each Party hereto of the Acquisition shall have been obtained or made.
(b) Representations and Covenants. The representations and warranties of the Sellers contained in this Agreement shall be true in all material respects on and as of the Closing Date with the same force and effect as though made on and as of the Closing Date. The Sellers shall have performed and complied in all material respects with all covenants and agreements required by this Agreement to be performed or complied with by the Sellers on or prior to the Closing Date.
(c) Litigation. No action, suit or proceeding shall have been instituted before any court or governmental or regulatory body or instituted or threatened by any governmental or regulatory body or person to (i) restrain, modify or prevent the carrying out of the Transaction or to seek damages or a discovery order in connection with such Transaction, or (ii) seeks to subject the Purchaser or any of its directors, officers, employees or agents to liability on the grounds that it or they have breached any law or regulation or otherwise acted improperly in relation to the transactions contemplated by this Agreement, or otherwise, or (iii) which has or may have, in the sole and absolute opinion of the Purchaser, an IMHC Material Adverse Effect.
| 12 |
(d) No Material Adverse Change. There shall not have been any occurrence, event, incident, action, failure to act, or transaction which has had or is reasonably likely to cause an IMHC Material Adverse Effect.
(e) Bankruptcy Proceedings. No proceeding in which IMHC or any Seller shall be a debtor, defendant or party seeking an order for its own relief or reorganization shall have been brought or be pending by or against such person under any United States, state or foreign bankruptcy or insolvency law.
(f) Deliveries. The deliveries specified in Section 4.01 shall have been made by the Sellers.
(g) Exchange of Promissory Notes. The Company shall have exchanged all outstanding promissory notes issued to Digital Power Lending, LLC for convertible notes, convertible into the Company’s common stock at a conversion price of $0.01 per share, in form acceptable to the Purchaser.
(h) No Liabilities. As of the Closing Date, IMHC shall not have any liabilities, excluding: (i) the convertible notes issued to Digital Power Lending, LLC, as disclosed in the IMHC Disclosure Schedule; (ii) the Convertible Promissory Note issued to GCEF Opportunity Fund, LLC dated January 14, 2021; (iii) legal fees incurred on or after November 1, 2021 (and there shall to IMHC’s and the Sellers’ knowledge, be no basis for any present or future action, suit, proceeding, hearing, investigation, charge, complaint, claim, or demand against it giving rise to any liability).
(i) OTC Markets Quotation. IMHC shall have maintained its status as a company whose common stock is quoted on the OTC Markets.
(j) No Suspensions of Trading in IMHC Shares. Trading in the Shares shall not have been suspended by the SEC or any trading market at any time since the date of execution of this Agreement.
ARTICLE VI
Covenants
SECTION 6.01. Public Announcements. The Purchaser and Seller will consult with each other before issuing, and provide each other the opportunity to review and comment upon, any press releases or other public statements with respect to the Agreement and the Transaction and shall not issue any such press release or make any such public statement prior to such consultation, except as may be required by applicable law, court process or by obligations pursuant to any listing agreement with any national securities exchanges.
| 13 |
SECTION 6.02. Fees and Expenses. All fees and expenses incurred in connection with this Agreement shall be paid by the Party incurring such fees or expenses, whether or not this Agreement is consummated.
SECTION 6.03. Continued Efforts. Each Party shall use commercially reasonable efforts to (a) take all action reasonably necessary to consummate the Transaction, and (b) take such steps and do such acts as may be necessary to keep all of its representations and warranties true and correct as of the Closing Date with the same effect as if the same had been made, and this Agreement had been dated, as of the Closing Date.
SECTION 6.04. Exclusivity. Each of the Purchaser and the Sellers shall not (and shall not cause or permit any of their affiliates to) engage in any discussions or negotiations with any person or take any action that would be inconsistent with the Transaction and that has the effect of avoiding the Closing contemplated hereby. Each of the Purchaser and the Sellers shall notify each other immediately if any person makes any proposal, offer, inquiry, or contact with respect to any of the foregoing.
ARTICLE VII
Indemnification; Survival
SECTION 7.01. Indemnification by Sellers. The Sellers, jointly and severally, shall indemnify and hold harmless the Purchaser, and shall reimburse the Purchaser for, any loss, liability, claim, damage, expense (including, but not limited to, costs of investigation and defense and reasonable attorneys’ fees) or diminution of value (collectively, “Damages”) arising from or in connection with (a) any inaccuracy in or breach or non-performance of any of the representations, warranties, covenants or agreements made by the Sellers or IMHC in or pursuant to this Agreement, (b) the failure of the Sellers or IMHC to perform fully any covenant, provision or agreement to be performed or observed by it pursuant to this Agreement, (c) Taxes attributable to any transaction or event occurring on or prior to the Closing, or (d) any litigation, action, claim, proceeding or investigation by any third party relating to or arising out of the business or operations of IMHC, or the actions of IMHC or any holder of IMHC capital stock prior to the Closing Date.
SECTION 7.02. Indemnification by Purchaser. The Purchaser shall indemnify and hold harmless the Sellers, and shall reimburse the Sellers for any Damages arising from or in connection with (a) any inaccuracy in or breach or non-performance of any of the representations, warranties, covenants or agreements made by the Purchaser in or pursuant to this Agreement, (b) the failure of the Purchaser to perform fully any covenant, provision or agreement to be performed or observed by it pursuant to this Agreement, or (c) any litigation, action, claim, proceeding or investigation by any third party relating to or arising out of the business or operations of IMHC, or the actions of IMHC or any holder of IMHC capital stock after the Closing Date.
SECTION 7.03. Survival. All representations, warranties and covenants of the Parties contained in this Agreement or in any instrument delivered pursuant to this Agreement shall survive until twelve (12) months after the Closing Date, except (i) as to any matter as to which a good faith claim has been submitted in writing to the other Party describing the claim and Damages in reasonable detail before such date and identified as a claim for indemnification pursuant to this Article VII with respect to which the cause of action shall expire when it is settled or otherwise determined in accordance with the provisions of this article VII and (ii) as to any matter which is based successfully upon fraud with respect to which the cause of action shall expire only upon expiration of the applicable statute of limitations.
| 14 |
SECTION 7.04. Notice of Claims; Resolution.
(a) If, at any time on or prior to the Claims Deadline, a Party (an “Indemnified Party”) shall assert a claim for indemnification pursuant to Sections 7.01 or 7.02, as the case may be, the Indemnified Party shall submit to the opposite party (the “Indemnifying Party”) a written claim stating: (i) that the Party incurred or reasonably believes it may incur Damages and the amount or reasonable estimate thereof of any such Damages; and (ii) in reasonable detail, the facts alleged as the basis for such claim and the section or sections of this Agreement alleged as the basis or bases for the claim (the “Notice”).
(b) Within thirty (30) days after receipt of Notice to an Indemnifying Party of such demand, claim or lawsuit, except as provided in the next sentence, the Indemnifying Party shall have the option, at its sole cost and expense, to retain counsel to defend any such demand, claim or lawsuit; provided that counsel who will conduct the defense of such demand, claim or lawsuit will be approved by the Indemnified Party whose approval will not unreasonably be withheld. The Indemnified Party shall have the right, at its own expense, to participate in the defense of any suit, action or proceeding brought against it with respect to which indemnification may be sought hereunder; provided, if (i) the named parties to any such proceeding (including any impleaded parties) include both the Indemnifying Party and the Indemnified Party, representation of both parties by the same counsel would be inappropriate due to actual or potential differing interests between them, and the Indemnifying Party has not retained separate counsel for the Indemnified Party, (ii) the employment of counsel by such Indemnified Party has been authorized in writing by the Indemnifying Party, or (iii) the Indemnifying Party has not in fact employed counsel to assume the defense of such action within a reasonable time; then, the Indemnified Party shall have the right to retain its own counsel at the sole cost and expense of the Indemnifying Party, which costs and expenses shall be paid by the Indemnifying Party on a current basis. No Indemnifying Party, in the defense of any such demand, claim or lawsuit, will consent to entry of any judgment or enter into any settlement without the consent of the Indemnified Party. If any Indemnified Party will have been advised by counsel chosen by it that there may be one or more legal defenses available to such Indemnified Party which are different from or in addition to those which have been asserted by the Indemnifying Party and counsel retained by the Indemnifying Party declines to assert those defenses, then, at the election of the Indemnified Party, the Indemnifying Party will not have the right to continue the defense of such demand, claim or lawsuit on behalf of such Indemnified Party and will reimburse such Indemnified Party and any Person controlling such Indemnified Party on a current basis for the reasonable fees and expenses of any counsel retained by the Indemnified Party to undertake the defense. No Indemnified Party, in the defense of any such demand, claim or lawsuit, will consent to entry of any judgment or enter into any settlement without the consent of the Indemnifying Party. In the event that the Indemnifying Party shall fail to respond within thirty (30) days after receipt of the Notice, the Indemnified Party may retain counsel and conduct the defense of such demand, claim or lawsuit, as it may in its sole discretion deem proper, at the sole cost and expense of the Indemnifying Party, which costs and expenses shall be paid by the Indemnifying Party on a current basis. Failure to provide Notice shall not limit the rights of such party to indemnification, except to the extent the Indemnifying Party’s defense of the action is actually prejudiced by such failure. The assumption of the defense, or the non-assumption of the defense, by the purported Indemnifying Party will not affect such party’s right to dispute its obligation to provide indemnification hereunder.
| 15 |
SECTION 7.05. Sole Remedy. The indemnification obligation under this Article VII shall be the sole and exclusive remedy available to any Indemnified Party with respect to any Damages (and any breaches underlying such Damages) incurred and/or sustained by any Indemnified Party. No Indemnified Party and/or any representative thereof shall have any other and/or additional liability and/or indemnification obligation towards any Indemnified Party under any agreement and/or legal requirements.
SECTION 7.06. Notice of Claims; Resolution.
(a) If, at any time on or prior to the Claims Deadline, a Party (an “Indemnified Party”) shall assert a claim for indemnification pursuant to Sections 7.01 or 7.02, as the case may be, the Indemnified Party shall submit to the opposite party (the “Indemnifying Party”) a written claim stating: (i) that the Party incurred or reasonably believes it may incur Damages and the amount or reasonable estimate thereof of any such Damages; and (ii) in reasonable detail, the facts alleged as the basis for such claim and the section or sections of this Agreement alleged as the basis or bases for the claim (the “Notice”).
(b) Within thirty (30) days after receipt of Notice to an Indemnifying Party of such demand, claim or lawsuit, except as provided in the next sentence, the Indemnifying Party shall have the option, at its sole cost and expense, to retain counsel to defend any such demand, claim or lawsuit; provided that counsel who will conduct the defense of such demand, claim or lawsuit will be approved by the Indemnified Party whose approval will not unreasonably be withheld. The Indemnified Party shall have the right, at its own expense, to participate in the defense of any suit, action or proceeding brought against it with respect to which indemnification may be sought hereunder; provided, if (i) the named parties to any such proceeding (including any impleaded parties) include both the Indemnifying Party and the Indemnified Party, representation of both parties by the same counsel would be inappropriate due to actual or potential differing interests between them, and the Indemnifying Party has not retained separate counsel for the Indemnified Party, (ii) the employment of counsel by such Indemnified Party has been authorized in writing by the Indemnifying Party, or (iii) the Indemnifying Party has not in fact employed counsel to assume the defense of such action within a reasonable time; then, the Indemnified Party shall have the right to retain its own counsel at the sole cost and expense of the Indemnifying Party, which costs and expenses shall be paid by the Indemnifying Party on a current basis. No Indemnifying Party, in the defense of any such demand, claim or lawsuit, will consent to entry of any judgment or enter into any settlement without the consent of the Indemnified Party. If any Indemnified Party will have been advised by counsel chosen by it that there may be one or more legal defenses available to such Indemnified Party which are different from or in addition to those which have been asserted by the Indemnifying Party and counsel retained by the Indemnifying Party declines to assert those defenses, then, at the election of the Indemnified Party, the Indemnifying Party will not have the right to continue the defense of such demand, claim or lawsuit on behalf of such Indemnified Party and will reimburse such Indemnified Party and any Person controlling such Indemnified Party on a current basis for the reasonable fees and expenses of any counsel retained by the Indemnified Party to undertake the defense. No Indemnified Party, in the defense of any such demand, claim or lawsuit, will consent to entry of any judgment or enter into any settlement without the consent of the Indemnifying Party. In the event that the Indemnifying Party shall fail to respond within thirty (30) days after receipt of the Notice, the Indemnified Party may retain counsel and conduct the defense of such demand, claim or lawsuit, as it may in its sole discretion deem proper, at the sole cost and expense of the Indemnifying Party, which costs and expenses shall be paid by the Indemnifying Party on a current basis. Failure to provide Notice shall not limit the rights of such party to indemnification, except to the extent the Indemnifying Party’s defense of the action is actually prejudiced by such failure. The assumption of the defense, or the non-assumption of the defense, by the purported Indemnifying Party will not affect such party’s right to dispute its obligation to provide indemnification hereunder.
| 16 |
ARTICLE VIII
Miscellaneous
SECTION 8.01. Notices. All notices, requests, claims, demands and other communications under this Agreement shall be in writing and shall be deemed given upon receipt by the Parties at the following addresses (or at such other address for a Party as shall be specified by like notice):
If to the Purchaser, to:
If to the Sellers, to:
SECTION 8.02. Amendments; Waivers; No Additional Consideration. No provision of this Agreement may be waived or amended except in a written instrument signed by IMHC, Purchaser and the Sellers. No waiver of any default with respect to any provision, condition or requirement of this Agreement shall be deemed to be a continuing waiver in the future or a waiver of any subsequent default or a waiver of any other provision, condition or requirement hereof, nor shall any delay or omission of any Party to exercise any right hereunder in any manner impair the exercise of any such right.
SECTION 8.03. Remedies. In addition to being entitled to exercise all rights provided herein or granted by law, including recovery of damages, the Sellers and the Purchaser will be entitled to specific performance under this Agreement. The Parties agree that monetary damages may not be adequate compensation for any loss incurred by reason of any breach of obligations described in the foregoing sentence and hereby agree to waive in any action for specific performance of any such obligation the defense that a remedy at law would be adequate.
SECTION 8.04. Interpretation. When a reference is made in this Agreement to a Section, such reference shall be to a Section of this Agreement unless otherwise indicated. Whenever the words “include,” “includes” or “including” are used in this Agreement, they shall be deemed to be followed by the words “without limitation.”
| 17 |
SECTION 8.05. Severability. If any term or other provision of this Agreement is invalid, illegal or incapable of being enforced by any rule or Law, or public policy, all other conditions and provisions of this Agreement shall nevertheless remain in full force and effect so long as the economic or legal substance of the Transaction contemplated hereby is not affected in any manner materially adverse to any Party. Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the Parties shall negotiate in good faith to modify this Agreement so as to effect the original intent of the Parties as closely as possible in an acceptable manner to the end that Transaction contemplated hereby is fulfilled to the extent possible.
SECTION 8.06. Counterparts; Facsimile or Electronic Execution. This Agreement may be executed in one or more counterparts, all of which shall be considered one and the same agreement and shall become effective when one or more counterparts have been signed by each of the Parties and delivered to the other Parties. Facsimile, e-mail, or other electronic execution and delivery of this Agreement is legal, valid and binding for all purposes.
SECTION 8.07. Entire Agreement; Third Party Beneficiaries. This Agreement, taken together with the Schedules and Exhibits hereto, (a) constitutes the entire agreement, and supersede all prior agreements and understandings, both written and oral, among the Parties with respect to the Transaction and (b) are not intended to confer upon any person other than the Parties any rights or remedies.
SECTION 8.08. Governing Law; Venue, Waiver of Trial by Jury. This Agreement shall be governed by, and construed in accordance with, the internal laws of the State of Nevada, without reference to principles of conflicts of laws. The Parties hereto hereby expressly and irrevocably agree that any suit or proceeding arising directly and/or indirectly pursuant to or under this Agreement shall be brought solely in a federal or state court located in the County of Clark, Las Vegas. By its execution hereof, the Parties hereby covenant and irrevocably submit to the in personam jurisdiction of the federal and state courts located in the State of Nevada and agree that any process in any such action may be served upon any of them personally, or by certified mail or registered mail upon them or their agent, return receipt requested, with the same full force and effect as if personally served upon them in the State of Nevada. The Parties hereto expressly and irrevocably waive any claim that any such jurisdiction is not a convenient forum for any such suit or proceeding and any defense or lack of in person jurisdiction with respect thereto. In the event of any such action or proceeding, the Party prevailing therein shall be entitled to payment from the other Party hereto of its reasonable counsel fees and disbursements.
| 18 |
EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY THAT MAY ARISE UNDER THIS AGREEMENT OR ANY AGREEMENT EXECUTED PURSUANT TO THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE IT HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY AGREEMENT EXECUTED PURSUANT TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY. EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT (i) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, (ii) IT UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF SUCH WAIVER, (iii) IT MAKES SUCH WAIVER VOLUNTARILY, AND (iv) IT HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 8.08.
SECTION 8.09. Joint Negotiation and Drafting. The Parties hereto have participated jointly in the negotiation and drafting of this Agreement and the agreements ancillary hereto and, in the event that an ambiguity or question of intent or interpretation arises, this Agreement and the agreements ancillary hereto shall be construed as jointly drafted by the Parties hereto or thereto and no presumption or burden of proof shall arise favoring or disfavoring any Party by virtue of the authorship of any provision of this Agreement or of any of the agreements ancillary hereto.
SECTION 8.10. Assignment. Neither this Agreement nor any of the rights, interests or obligations under this Agreement shall be assigned, in whole or in part, by operation of law or otherwise by any of the Parties without the prior written consent of the other Parties. Any purported assignment without such consent shall be void. Subject to the preceding sentences, this Agreement will be binding upon, inure to the benefit of, and be enforceable by, the Parties and their respective successors and assigns.
{Signature page follows}
| 19 |
IN WITNESS WHEREOF, the parties hereto have executed and delivered this Stock Purchase Agreement as of the date first above written.
| The Sellers: | |||
| Vincent Andreula | |||
| Michael Andreula | |||
| Kristie Andreula | |||
| The Purchaser: | BITNILE, INC. | ||
| By: | |||
| Print name: Henry Nisser | |||
| Title: President | |||
| 20 |
Schedule 1.01
| Seller Name | Number of Shares | Purchase Price to be Paid ($) |
| Vincent Andreula | 99,463,756 | 145,978.40 |
| Michael Andreula | 14,900,000 | 26,920.46 |
| Kristie Andreula | 15,000,000 | 27,101.14 |
| Totals | 129,363,756 | $200,000.00 |
EXHIBIT A
ESCROW AGREEMENT
IMHC Disclosure Schedules
Schedule 2.04
| · | Convertible Note issued to GCEF Opportunity Fund, LLC on January 14, 2021 in the principal face amount of $75,000, maturing on January 14, 2022. Bears interest at 10% per annum and is convertible into common stock at $0.005 per share. |
| · | Convertible Note issued to Digital Power Lending LLC on December 15, 2021 in the principal face amount of $101,528.77, maturing on December 15, 2023. Bears interest at 10% per annum and is convertible into common stock at $0.01 per share. |